Fool's Gold Report: Gold Tops $1,300 on Ukraine Tensions; Newmont Soars on Earnings

The threat of conflict on Ukraine sent precious metals jumping Friday, and Newmont Mining delivered its earnings report today.

Apr 25, 2014 at 5:40PM
Longview

Once again, geopolitical issues took center stage in the gold market Friday, and as tension in Ukraine continued to escalate, gold investors were willing to take advantage of trends favoring safe-haven buying. By the close, gold futures had climbed back above the $1,300 level, sending SPDR Gold Shares (NYSEMKT:GLD) up 0.7% on the day. Palladium pushed even further above the $800 mark, lifting shares of Stillwater Mining (NYSE:SWC). Earnings also played a role in the gold market today, with Newmont Mining (NYSE:NEM) having reported its results after the bell yesterday.

Why palladium rose
Palladium's climb came largely as a result of fears about what form economic sanctions against Russia might take. With South African sources of palladium unavailable due to labor strikes, Russia is the largest source of palladium for the world market. If sanctions close that market, the only remaining sources would be the relatively small production available from Stillwater Mining and some other small players in the industry. With demand for palladium from automakers remaining relatively firm, the rise in price is a natural response to the Russian uncertainty.

Nem

Source: Newmont Mining.

How did Newmont Mining fare?
On the earnings front, Newmont Mining rose almost 4% after the mining company reported its first-quarter results. Earnings topped expectations, but perhaps the best news for the gold miner was that its all-in sustaining costs were well below the midpoint of Newmont's previous guidance, coming in at $1,034 per ounce. That leaves Newmont with a solid margin even with gold prices at depressed levels, and points to the success that the miner has had in its cost-containment efforts. Political issues in Indonesia weighed on Newmont Mining's operations there, and investors remain uncertain about whether the nation's export tax will be lifted at some point. But big gains in gold production at its Tanami mine in Australia helped offset the Indonesian headwinds.

Still, much of the attention on Newmont Mining came from ongoing discussion of the possibility of a merger with Barrick Gold (NYSE:ABX). Barrick Gold's Chairman, Peter Munk, criticized Newmont yesterday, saying that "they are not shareholder-friendly." At this point, those comments seem merely like posturing, as both parties try to get the best possible deal for their respective shareholders. Still, until Barrick Gold and Newmont Mining reach a final agreement -- if ever -- speculation is likely to continue about consolidation in the gold market.

How metals moved today
June gold futures rose $10.20 per ounce Friday, settling at $1,300.80. May silver futures were only modestly higher, rising less than $0.01 to remain near $19.69. Platinum-group metals were higher on Russian concerns, as palladium finally punched through the $800 level for good.

Metal

Today's Spot Price and Change From Previous Day

Gold

$1,302, up $8

Silver

$19.72, up $0.07

Platinum

$1,419, up $11

Palladium

$807, up $8

Source: Kitco. As of 4:30 p.m. EDT.

This weekend, watch the eastern part of Ukraine closely for signs of further aggression. If the area begins to heat up, or if Western nations take action that's any more dramatic than minor economic sanctions, then gold could continue to rise next week.

Three stocks poised to be multi-baggers
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multi-bagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers